One of the most common myths about bankruptcy is that it forever destroys your credit. While it takes time to improve your credit score after a bankruptcy filing, with patience and hard-work, a debtor can rebuild his or her credit. It is important to understand what the credit reporting agencies (the three major credit reporting companies are Experian, Equifax, and TransUnion) consider in calculating your credit score:
•Payment history. It is essential that you review your credit report each year to verify it is accurate. If you find any errors, be sure to have them removed.
•Credit history. Having a history of credit is important, so it may be wise to keep old credit accounts alive rather than cancelling them. This is especially true if the account is paid-off and sitting unused.
•Amount of debt owed. When you emerge from your bankruptcy case, you will have eliminated the majority, if not all, of your debt. However, paying down any remaining debt should still be a priority.
•Recent credit history. Paying your bills in a timely manner and maintaining credit cards with only low balances is crucial to rebuilding your credit score. After your bankruptcy filing, it is important that you demonstrate responsible credit card use.
The bankruptcy lawyers at Levitt & Slafkes, P.C. know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm onlineby filling out the form or by calling 973-323-2953 to schedule a free initial consultation.